Amid the noise about no-deal, a blind Brexit is being put in place

The quality of political debate in Britain is hitting new lows. The politicians are not interested in helping us understand what is going on, just in promoting some half-true story or other. ‘Twas ever thus. What has changed is that challenge from journalists and commentators is weaker. Most media are promoting their own agendas. The BBC tries to be better, but it just presents one fiction, compares it to the alternative fiction being offered, and retires. Few are interested in talking about what is really happening.

The current talk about a “no deal” Brexit is a case in point. On the one hand, business groups are worrying that this will lead to an Armageddon on the day after exit, at the end of March next year. This is pounced on with glee by Remain supporters as a sort of “told-you-so”. Government ministers simultaneously try to say that it just won’t happen, that it is the fault of EU intransigence, and that anyway no deal is better than a bad deal. Brexiteers, like the Conservative Ian Duncan Smith last weekend, just talk about something else completely. What are we to make of this all?

First of all, we have to be clear about what a no-deal Brexit actually is. We are not talking about the choice between the Single Market or WTO terms or something in between. This is what IDS, William Rees-Mogg and others change the subject to when pressed on the topic. What is meant by no-deal is, well, no deal. No trading protocols, no divorce bill, no transition period, no mutual recognition of citizens’ rights, no common VAT infrastructure, no mutual recognition of standards. Just a vacuum in place of 40 years of accumulated law and regulation.

And that could be Armageddon. There would be queues at ports, empty shelves in shops, hospitals running out of medicines, layoffs in all kinds of businesses, holidays cancelled and even planes grounded at airports. Things would start to settle down in due course, but with Britain in the weakest possible bargaining position, it is very hard to see how most people aren’t going to be made worse off. It is no wonder that Brexiteers don’t want to talk about it. They are prone to suggesting that threatening a no-deal will improve Britain’s bargaining position in the exit negotiation – a bit like threatening to walk away from a house purchase when you are making yourself homeless.

In fact, if the pro Brexit politicians were interested in intelligent engagement they could make two points. The first is that a no-deal is not in fact all that likely, because the deal is quite close to being done. The main sticking point is trying to find a form of words that will cover the EU’s demands on the Irish border. The British government thinks that the current draft is politically suicidal, because it opens the possibility of Northern Ireland having some form of semi-detached status, with a strong boundary between it and the rest of the UK. Although most British people are quite chilled by that prospect, it would have devastating political consequences in the province. But a no-deal would almost as devastating for Ireland as it would be for Britain, so there is sure to be some flexibility on this. Indeed, there are already some signs of movement from the European Commission. The rest can be fudged, even if it does open up the prospect of another no-deal cliff edge when the transitional period comes to an end, on 31 December 2020. This is what the Scottish First Minister Nicola Sturgeon is calling a “blind Brexit”: one where the longer term relationship is unresolved. This is exactly what the UK and EU negotiators are planning.

The second point to make is that we will know if there is likely to be a no-deal later this year – probably October. After that it becomes too late for the deal to tidied up and ratified by all the bodies required to do this, for such a complex treaty, in both Britain, the EU institutions and in other EU countries. That gives perhaps five months to prepare for that cliff edge. Temporary stop-gaps can be put together for the most urgent issues: citizens’ rights, air traffic, and so on. I can’t see that a lot of supply chains or border facilities will be sorted out by then – the infrastructure can take years to build – so there will still be chaos at the borders and some lay-offs. But we should avoid Armageddon.

And the rest is theatre. Remainers want to build up a sense of crisis so that people seriously start to rethink the whole foolish enterprise and call it off before it is too late. They know that once we get beyond exit day it will be much, much harder to get the UK back into the EU. The government thinks it is wise to keep its head down to preserve unity within the Conservative Party and to keep the Democratic Unionists of Northern Ireland on board. The Brexiteer politicians (the clever ones) have probably decided that this battle is done and are getting on with the next one: which is the shape of the world on 1 January 2021. Their main concern is that any deal done on Ireland does not lock out their preferred solution, which, for now, is some sort of Canada trade deal.

Admittedly this is quite delicate. A Canada deal looks incompatible with on open Irish border, which, with Republican terrorists still active and Loyalist groups ready to retaliate, could restart an escalation of violence. But the thing is to fudge it for now and hope that the passage of time will make the problem easier to solve. Under the transitional arrangements there would be an open border until 31 December 2020.

Theresa May’s government has played a weak hand quite well. At the cost of making any progress on other burning political issues, including the ones that led to the referendum backlash, she’s winning on executing Brexit. She is better off without Boris Johnson and David Davis, the two ministers who resigned in a huff. It would have been better to have negotiated a deal on citizens’ rights separately, and put it to bed ages ago; that would make no-deal less scary. The EU side was dead set against this – but it would have been a bonus to their own citizens, so they might have given way. Mrs May made no serious effort (or any effort at all so far as I know) to do this.

So the good news is that Brexit Armageddon is very unlikely. The bad news is that the Brexit roadshow will keep on running after 29 March 2019. I read one article recently which looked forward to the day when we could move on from Brexit to sorting out Britain’s many other problems. Alas that day is still years away.

I’ve just watched the first five minutes. I love the paradox that the solution offered by Brexiteers is to throw our borders wide open, when they told voters that the whole point was to control our borders! A no-deal is practically unthinkable, which why I don’t think it will happen, and why the Brexit politicians like IDS always change the subject. But pushing the date on to 31 December 2020 is going to be challenging enough!

An interesting post – but I am a bit pessimistic about the prospect it suggests in both political and economic terms.

Politically, the hardest problem is probably that posed by the Irish Border issue, as it has been for some time. I don’t see the Irish Government compromising on its demand for no return to a hard border with Northern Ireland; it would be highly unpopular with its own electorate if it did, it would be vulnerable to the consequences of terrorism starting up again, and it is part of the EU which has a greater bargaining power than the UK. So if May’s strategy of a blind Brexit is to work, it seems to depend on a heavy fudge being possible as to whether we will incur a border in goods down the Irish sea after 2020 (heavily opposed by the DUP and some hard line Brexiteers), or whether we will become permanently a rule-taker in standards for industrial goods (heavily opposed by all hard-line Brexiteers).

Economically, May knows perfectly well that the extra opportunities offered by Brexit to UK exporters are no where near as large as the lost opportunities in the EU and the countries with which it has special agreements – she has personally visited the three countries on which the Brexiteers were pinning the largest hopes, namely the US, Japan and India. Industries which depend on good supply chain links with the EU (aerospace, cars in particular) are threatening to contract fairly quickly following a hard Brexit, where-as new capacity elsewhere in the economy takes time to build. So the danger is that Brexit will not be a success economically in the first 10-20 years after it occurs – and yet Britain could badly do with some extra wealth in this period to help ease the social discontents arising after a 10 year period in which average living standards have not improved.

I agree that there will need to be a colossal dose of fudge on the Irish question, but the incentives on both sides to agree on that fudge are colossal, which is why I think the odds are on finding it.

It’s hard to see much good coming out of all this though. We are just trying to limit the harm.